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Food Franchising In India

Written by: Amit Nahar

Article Overview: An overview of the food franchising industry in India.Entrepreneurs/Companies in the f&B segment seeking to expand their business across india could understand the demography.With the North of India leading the way followed by West India and then South india and lastly, eastern india it is interesting to see how these franchisors are spread.With a market size of $72 Billion and growth expected to be around 20$, it is a important segment to watch.Also international franchisors these indicators could be encouraging. Food, Education & Retail are leading the way to franchise expansions in India and other service concepts are catching up.Hence these are exciting times for franchisors,franchisees and franchise consultants and the entire franchise eco system. Franchise Development & Cohesive Expansion Sstrategy could get you started in india.

Food Franchising In India

I was going through this report bought out by a joint study done by the Federation of Indian Chambers of Commerce & Industry (FICCI) and the Confederation of Indian Food Trade & Industry (CIFTI), which says that over 30 per cent of new food outlets which are coming up in almost all the cities across the country are through the franchise system.

About 17 per cent of food and beverages in the organized sector is operated by franchisors. There are about 1,200 franchisors at present of which 150 are exclusively dealing in food and beverage retail. About 75 per cent of these are of Indian origin and the rest are international. There are around 18,000 franchised restaurants in the country as compared to only 2,500 run by company-owned entities.

The study further says that recent trends indicate that the franchise system can grow strongly in times of recession. While other sectors are laying off people, franchisors are recruiting new franchisees. They also need more professionals for planning and managing their network growth strategy.

Today, the total number of people employed in the franchise system is estimated at 9.5 lakh - 7.5 lakh are permanent full-time employees, 80,000 are permanent part-timers and casual workers are at 1.2 lakh.

According to the study, the Delhi National Capital region (NCR) boasts of having 408 brand franchisors. Western India, with 386 brands - the bulk of them from Mumbai and Gujarat - occupies the second spot, followed by southern India (250 brands, mostly in Bangalore and Chennai). The eastern region brings up the rear with 58 brands, the majority of them concentrated in Kolkata.

It is noted that the majority of the franchising activities occur in the northern states, especially in Delhi and NCR region, followed by the western region - Mumbai, Pune, Surat, Ahmedabad, Jaipur, Udaipur, Indore etc. The per capita spend in northern India is much higher than in other states and this drives the franchisers to expand their operarations in this region. The central and southern cities like Kochi, Chennai,Coimbatore, Hyderabad,Vizag and Bangalore are indisputable destinations where franchisers want to have their footprints but there is relatively less activity in the east and north eastern states except Kolkata, Guwahati, Patna and Bhubaneswar.

The study estimates that the Indian franchising sector is growing at 38 per cent per annum with a market size of $72 billion. It is expected to reach $20 billion by 2013. Education and retail are two important areas where franchising is prominent.

The study forecasts that the Indian food service entrepreneur is ready with massive expansion plans which will help the sector grow at 48 per cent in the next two years. International food service brands are looking at the Indian market as a profitable investment destination. The size of the Indian food service market is at $11 billion but organized players enjoy less than 8 per cent of the market. There are 10 million street vendors in India, of which six million sell ready-to-eat stuff.

In India, consumer food services' value sales grew at a strong 20 per cent in 2007-08, second only to that of Vietnam and Indonesia.Hence a strong case in point of the franchise predominance in the franchising sector in food.Hence if you are in food and are seeking to expand your business across India, start franchising.

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Article Tags: eastern india, education, expansions, fast food, franchise consultants, franchise development, franchise india, franchise system, franchising in india, franchisors, india food, leading the way, new franchise, segment, south india, west india



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